Ideas that went nowhere…..

Okay, that’s a bit melodramatic. Let’s start again. It used to be the case that to have a professional career as an economist in America, you needed a PhD. That’s changing a lot. There’s a general glut of PhDs. And organisations such as the IMF are now more interested in people with practical experiences than half a decade or more of often impractical academic training. In any case, outside America, PhDs were always for those who wanted to pursue an academic career. So, other than the vanity of being addressed as Dr Rahman, I’ve never really seen much return from doing a PhD.

And yet, every now and then, I think about the ideas over the fold and wonder what might have been.

1999 – Return migration

This was around the time when phrases such as Asian diaspora or Non-Resident fill-in-your-country started entering popular lexicon. But the professional literature was still based on the 1960s/1970s debates around the models and estimates of brain drain or lack thereof. The idea was to explore when and how return migration would make sense, possible extent and effect of such migration on both host and source countries, and policy implications.

2000 – Economics of online file-sharing

This was when Napster just emerged. The idea was simple — the best ideas usually are: how would the standard microeconomics handle online file-sharing, who gained and lost, in both partial and general equilibrium setting, under different market conditions. This would have been a fairly theoretical project, as relevant data was simply not available at the time.

2005 – Education policy and economic growth

Education is important for economic growth — this is a simple, seemingly uncontroversial statement. You don’t need an economics degree to get this. But turns out that the relevant policy lessons are anything but simple. During the 1980s and 1990s, across the developing world, a lot of effort had gone into getting kids to school. By the mid-2000s, we saw that there wasn’t any simple correlation between investment in education and pick up in economic growth. School quality was probably more important than quantity. But how do you get quality school? Do you invest heavily in teachers’ colleges? But who teaches the teachers? Is the marginal dollar better spent on tertiary education? But without demand for university graduates in productive sectors, will the graduates end up in competitive rent seeking? Meanwhile, how influential were direct public investment relative to NGOs and demand coming from the private sector?

2011 – Indian exceptionalism

Over time, and across countries, economic development is accompanied by industrialisation and urbanisation — people move from villages and farms to cities and factories, that’s the story of economic development. Indian experience, however, is somewhat odd. It has been much less industrialised and urban relative to its per capita GDP. Why? Dig deeper, it turns out that the average Indian doesn’t move much. Is it because of the heterogeneity? As for industrialisation, or lack thereof, is it the legacy of Nehruvian socialism? Or are there other factors at play?

2013 – Urbanisation in emerging Asia

In 2008, Paul Krugman won a Nobel prize for, among other things, his work on economic geography. In 2009, World Bank published a groundbreaking report linking economic geography with development. In 2011, urban protests around the world caught public imagination. And yet, there has been surprisingly little policy synthesis in key emerging Asian countries. Hence the project.

≪Second, there’s a huge spread in growth rates among poor countries — but that largely reflects noneconomic factors, mainly war external and civil (plus negative growth in much of the former Soviet Union, again about social disruption). Some of the high growth rates reflect recovery from chaos — I believe that’s what Sudan and Burma are about — but for the most part not; instead, we’re witnessing successful catchup. And of course the really big countries in that group (Bangladesh has also done much better than people seem to know) mean that we’re looking at a very large number of people.≫

I think it’s one of the few times he’s mentioned Bangladesh in any of his writings [that I am aware of. The other was an article he did concerning globalization that mentioned child labor practices and unsavory conditions for workers].

I would think that at the lower end of the economic chain, school quality is not as important. Basic numeracy and literacy probably provides the sufficient skills necessary to carry out workers jobs. I remember reading about the comparative experiences of two countries, Ghana and Thailand, and their rates of higher educational enrollment and economic growth. Over a given period, it turned out that Ghana’s children were schooled for longer and had better access to higher education. However, this did not translate into economic growth. Thailand grew much faster, but their years of schooling and higher education was comparatively lower. The conclusion was something to the effect that you did not require much higher level of education beyond that which was useful for employment [perhaps a common sense conclusion], and to a certain extent it could hamper growth at the early stages of development. I’ll see if I can find the paper/article.

I suppose there’s the [somewhat controversial] view that having a piece of paper does not necessarily mean that you understand the principle [when viewed as a whole] in depth. Some of the best people I have worked with are those that had the skills to learn things on the go [e.g. autodidacts], and wouldn’t be put off doing something on an ad-hoc basis. They were learned, flexible and had better vision and execution than many of the more “academic” [on paper] types.

Good thinking. This is a very good avenue to approach. A country do not need millions of software developers or business analysts, several hundred thousands are good enough. High quality education for those who will work in unskilled service or manufacturing may be dead loss. But this is very politically incorrect and contrary to the ‘American Dream’.